Soooooooooooooo it has been a while since I last posted--personal health issues and the death of a loved one was the reason.
During the last 9 yrs you (and I) have missed the single best investment in the history of the world--bitcoin: a fake financial instrument marketed as a currency has gone up 100s of thousands of percent. Essentially the instrument went from under 1$ to around 19k per coin over this period. Yup no stock, bond, currency, commodity, derivative, or any other financial asset in world history has ever achieved such gains in such a short period of time. Bitcoin the single best investment of all time!!!!!!!!!
Bitcoin is also the world's first and largest global asset bubble. This is not a US thing, Europe thing, or Asian thing. This is a global phenomenon made available by the internet.
Below is the chart which makes you want to truly vomit if you missed it.
Make no mistake this is a bubble which will eventually collapse---however these returns are real and represent real wealth and some people have made life changing profits. If you are a bitcoin holder please remember this: You have won the lottery please lock in your profits and enjoy your wealth.
However They Don't Sell
I have friends who have owned bitcoin since 2010. They have made a killing yet none of these bitcoiners has sold since they believe it will only go higher. This religious faith in cryptocurrencies is widespread and there are over 500 new cryptocurrencies like Ripple, Ethereum, Litecoin, Dash, and Monero just to name a few.
Anecdotal Evidence of a Bubble
1. My mother's dialysis nurses and technicians are "actively trading" bitcoins. These people don't own stocks and never have. Instead, they fancy themselves as bitcoins professionals and have started to trade bitcoin the last 7 months. All feel invincible since the price of bitcoin has gone straight up.
2. They tell my 69 yr old mother who is on dialysis to buy bitcoin because it is a "sure thing" and "easy money." She should get out of her stocks, real estate, and bonds because bitcoin is "the future of money and wealth."
3. Furthermore they say all bitcoin price corrections are buying opportunities---bitcoin is going to 50k, 100k, or even higher. It is guaranteed. The only fear in the bitcoin market is missing out on exponential gains. One dialysis technician bought bitcoin on weakness around 12k on Dec 25th and just "flipped it" for 16k a few days later. He is going to Vegas later in January with these fast easy bitcoin profits.
4. It is okay to use credit cards to buy bitcoin they say. Price appreciation will easily outpace 10-12% interest on credit cards.
5. They tell my mother she needs to get in now or she will miss making millions The fear of missing out is at extreme levels generally associated with historical bubbles like the tech mania from 1998 to 2000.
Conclusions
If this is not a bubble I don't know what is.
Bitcoin is not a currency--currencies don't go up 1000's of percent per year since they are supposed to be a safe secure of value.
Bitcoin is not even an investment anymore. The volatility of bitcoin and its ponzi like structure(people can create/mine bitcoin out of nothing) makes the stock market look safe and secure.
Bitcoin is a global mania driven purely by the fact it is going up parabolically. AKA "you have to buy bitcoin because it is going higher because it has to go higher."
The insanity may continue for much longer than skeptics believe--this is the nature of bubbles.
This WILL END BAD for bitcoin speculators. Cryptos will continue to exist because they make great instruments for conducting illegal actives and money laundering. Want to buy illegal steroids, drugs,evade taxes,etc? You can with bitcoins and the other 500+ cryptocurrencies ha ha.
I wish I had been smart enough to buy bitcoin, but after the theft/fraud incident at Mt Gox (the largest bitcoin dealer at the time) I decided it was not a suitable investment/asset class. Your bitcoins can be stolen electronically by hackers and there is nothing you can do to recover them. Bitcoins are not FDIC insured and the companies holding bitcoins for clients can disappear overnight leaving you with 0 bitcoins.
The parabolic rise of bitcoin will only be equaled to by its epic collapse.
Bitcoin and Cryptocurrency Predictions
The US government and most G-20 countries will begin to finally regulate and eventually legislate bitcoin and most cryptocurrencies out of existence. We have already seen the beginning of this with the latest actions from China and South Korea. No sovereign government will allow bitcoin to replace government backed fiat currency.
Nation states and central banks will introduce their own version of cryptocurrency in the coming years to transfer the world to a cashless economy. This will make every transaction easily tracked, recorded, and taxed by the government in real time.
BSI
During the last 9 yrs you (and I) have missed the single best investment in the history of the world--bitcoin: a fake financial instrument marketed as a currency has gone up 100s of thousands of percent. Essentially the instrument went from under 1$ to around 19k per coin over this period. Yup no stock, bond, currency, commodity, derivative, or any other financial asset in world history has ever achieved such gains in such a short period of time. Bitcoin the single best investment of all time!!!!!!!!!
Bitcoin is also the world's first and largest global asset bubble. This is not a US thing, Europe thing, or Asian thing. This is a global phenomenon made available by the internet.
Below is the chart which makes you want to truly vomit if you missed it.
Make no mistake this is a bubble which will eventually collapse---however these returns are real and represent real wealth and some people have made life changing profits. If you are a bitcoin holder please remember this: You have won the lottery please lock in your profits and enjoy your wealth.
However They Don't Sell
I have friends who have owned bitcoin since 2010. They have made a killing yet none of these bitcoiners has sold since they believe it will only go higher. This religious faith in cryptocurrencies is widespread and there are over 500 new cryptocurrencies like Ripple, Ethereum, Litecoin, Dash, and Monero just to name a few.
Anecdotal Evidence of a Bubble
1. My mother's dialysis nurses and technicians are "actively trading" bitcoins. These people don't own stocks and never have. Instead, they fancy themselves as bitcoins professionals and have started to trade bitcoin the last 7 months. All feel invincible since the price of bitcoin has gone straight up.
2. They tell my 69 yr old mother who is on dialysis to buy bitcoin because it is a "sure thing" and "easy money." She should get out of her stocks, real estate, and bonds because bitcoin is "the future of money and wealth."
3. Furthermore they say all bitcoin price corrections are buying opportunities---bitcoin is going to 50k, 100k, or even higher. It is guaranteed. The only fear in the bitcoin market is missing out on exponential gains. One dialysis technician bought bitcoin on weakness around 12k on Dec 25th and just "flipped it" for 16k a few days later. He is going to Vegas later in January with these fast easy bitcoin profits.
4. It is okay to use credit cards to buy bitcoin they say. Price appreciation will easily outpace 10-12% interest on credit cards.
5. They tell my mother she needs to get in now or she will miss making millions The fear of missing out is at extreme levels generally associated with historical bubbles like the tech mania from 1998 to 2000.
Conclusions
If this is not a bubble I don't know what is.
Bitcoin is not a currency--currencies don't go up 1000's of percent per year since they are supposed to be a safe secure of value.
Bitcoin is not even an investment anymore. The volatility of bitcoin and its ponzi like structure(people can create/mine bitcoin out of nothing) makes the stock market look safe and secure.
Bitcoin is a global mania driven purely by the fact it is going up parabolically. AKA "you have to buy bitcoin because it is going higher because it has to go higher."
The insanity may continue for much longer than skeptics believe--this is the nature of bubbles.
This WILL END BAD for bitcoin speculators. Cryptos will continue to exist because they make great instruments for conducting illegal actives and money laundering. Want to buy illegal steroids, drugs,evade taxes,etc? You can with bitcoins and the other 500+ cryptocurrencies ha ha.
I wish I had been smart enough to buy bitcoin, but after the theft/fraud incident at Mt Gox (the largest bitcoin dealer at the time) I decided it was not a suitable investment/asset class. Your bitcoins can be stolen electronically by hackers and there is nothing you can do to recover them. Bitcoins are not FDIC insured and the companies holding bitcoins for clients can disappear overnight leaving you with 0 bitcoins.
The parabolic rise of bitcoin will only be equaled to by its epic collapse.
Bitcoin and Cryptocurrency Predictions
The US government and most G-20 countries will begin to finally regulate and eventually legislate bitcoin and most cryptocurrencies out of existence. We have already seen the beginning of this with the latest actions from China and South Korea. No sovereign government will allow bitcoin to replace government backed fiat currency.
Nation states and central banks will introduce their own version of cryptocurrency in the coming years to transfer the world to a cashless economy. This will make every transaction easily tracked, recorded, and taxed by the government in real time.
BSI
